Saturday, April 3, 2010

In the partnership firm, an inter-relation of partners means the mutual relationship among the partners. Such mutual relationship among the partners is related with the rights and liabilities. According to Partnership Act, 2020, the rights and liabilities of partnership is maintained through partnership deed prepared among the partners. If there is written partnership deed inter-relations of partners will be in accordance to it, otherwise following clauses from 13 to 26 of Partnership Act will prevail.

(1) Assets of Partnership : The total assets of partnership will be as follows:a. All assets collected during the operation of the partnership transactions.b. The assets received for the utilization of partnership.c. The wealth earned through partnership.d. The goodwill earned by partnership firm

(2) Use of Partnership Asset : The partnership property should not be used for other purposes by the partners except for the partnership use.

(3) Additional Capital not Compelled : Although other partners demand for more capital, a partner will not be compelled to invest additional capital mentioned in the partnership deed.

(4) No Right to Keep Substitute : No partner has right to make or keep his substitute without the consent of all partners.

(5) Right to Participate in the Business : All partners, except restricted by partnership deed can participate in the management of partnership business. But without the consent of all partners, unrelated work should not be performed in the name of partnership.

In such a situation, where any or all functions of all business should be carried on by two or more than two partners jointly as per the partnership deed. In case any partner becomes unable to carry on such function then he can authorize any partner with reasonable cause.

(6) Right to Inspect and Copy Accounts : Each partner can inspect books of accounts. In case a partner requests for a copy of account, then the authorized partner should provide a copy duly signed by him.

(7) Remuneration an Internet : Each partner can get remuneration for his work in partnership as mentioned in the partnership deed. In case he has invested excess capital then he can get interest not more than 10 percent as per the deed. However, if a partner makes a loss due to his negligence he should pay the loss.

(8) Profit Earned by a Partner is the Profit of the firm : If any partner earns from the partnership business or by using firm’s property or in name of firm, then he should submit such profit and accounts to the firm.

(9) Amount Received from Partner must be shown : All the expense paid to partners and all incomes received from partners must be clearly shown in the profit and loss account of the fiscal year.

(10) Distribution of Profit and Loss : Profit and loss of partnership will be distributed as per partnership deed, in absence of it they will be distributed equally. If interest is to be paid to the capital of the partners as per partnership deed, such interest should be paid only by the profit.

(11) No Right to Get Profit : If a partner has not fully paid his capital payable to the firm, he cannot get his share of profit unless he pays fully.

1 comments:

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